Daniel David "Dan" Rostenkowski (January 2, 1928 – August 11, 2010) was a United States Representative from Chicago, serving from 1959 to 1995. He become one of the most powerful legislators in Washington, especially in matters of taxation, until he went to prison.[1] He was a member of the Democratic Party. The son of a Chicago alderman, Rostenkowski was for many years Democratic Committeeman of Chicago's 32nd Ward, retaining this position even while serving in Congress.

Rostenkowski closed legislative deals between the toughest power brokers in the U.S., from union chiefs to corporate titans to the president himself. The book Chicago and the American Century credited Rostenkowski with securing billions of dollars for projects in Chicago and throughout Illinois. The book named him the sixth most significant politician to come from Chicago in the twentieth century.[1]

Rostenkowski's political career ended abruptly in 1996 when he pleaded guilty to charges of mail fraud and was fined and sentenced to 17 months in prison.

Dan Rostenkowski was born into a political family in Chicago to Joseph P. and Priscilla (Dombrowski) Rostenkowski. His grandfather Piotr had immigrated from the region of Tuchola, Poland. His father, Joe, locally known as, “Big Joe Rusty” served as alderman and committeeman of the predominantly Polish 32d Ward in what was then known as "Polish Downtown" for twenty-four years. As a child, Dan and his two sisters, Marcie and Gladys often saw their family home double as a meeting place for precinct captains who, like Walter Kmiec from his father’s ward organization, would later assist him in bringing in the vote in 1960 for John Kennedy.[3]

The Rostenkowski home was on the second floor of 1349 Noble Street in Chicago, above the tavern owned by Priscilla and adjacent to the alderman's insurance agency and the headquarters of the regular Democratic 32nd ward organization. Near dawn on August 6, 1938 Joe heard shots. Two top precinct captains for the alderman were shot multiple times as they slept in a car parked in front of the Rosternkowski home. Joe took his family to the Rostenkowski summer home in Genoa City, Wisconsin. The killers were never caught.[4][5]

In 1952, while still a student at Loyola, the twenty-four-year-old Rostenkowski was elected to the Illinois House of Representatives in Springfield, Illinois. He was its youngest member. As a state lawmaker, Rostenkowski worked on the planning and financing of a major federal highway from downtown Chicago to the new O'Hare International Airport. Like Daley and many other Chicago politicians before him, serving in Springfield was often viewed as a first step to a higher office in Chicago. The perception of the state legislature as training ground went hand in hand with another idea, that Chicago, not Springfield or Washington constituted the most desirable locus of political life.” (Cohen 24) After two years in the House, he was elected to the Illinois State Senate in 1954. In 1957 he pushed a bill to extend state funded free polio vaccines to children as well as a bill that would have provided bonuses of up to $555 for Korean War veterans – financed by a one-cent cigarette tax. It passed, but was later rejected by Illinois voters in a 1958 referendum.(Merriner 76)

While serving his second term in the senate, Chicago Mayor, Richard J. Daley suggested that he run for clerk of the Cook County Court, instead, Rostenkowski pushed for and received Daley’s support to run for the United States Congress.

As a young and outgoing urban Democrat, new to Washington, Rostenkowski quickly found mentors and made friends with other Democrats. His relationship with Massachusetts Reps. Edward Boland and Torbert Macdonald as well as John F. Kennedy aides Lawrence O'Brien and Kenny O'Donnell led to his involvement in JFK's run for the White House. In 1960 at the request of the Kennedy campaign he gave speeches in southern states for Kennedy. Chicago voters turned out in large majority for Kennedy.

On September 26, 1960, Rostenkowski witnessed what many consider the turning point in Kennedy's battle with Richard Nixon. Kennedy invited Rostenkowski to the CBS studios in downtown Chicago to view in person, the first ever televised Presidential debate. Unaware of the two candidates' stark differences on camera, Rostenkowski later said “I was under the impression that Kennedy lost the debate.” (Cohen, 48)

In the aftermath of Kennedy's assassination Rostenkowski was one of a small group who made regular visits to Jacqueline Kennedy's home in Georgetown. "On a regular basis Kenny O'Donnell would get three or four of us from Capitol Hill, who worked with Jack Kennedy, together at Jackie's house. We would sit around Jackie's living room with Bobby Kennedy eat sandwiches, have some drinks and tell war stories. Jackie would laugh so hard her side would hurt sometimes. (O'Donnell, 339)

In his first decade in Congress, Rostenkowski gradually attained a position of influence in the House. In his freshman term he secured a position on the Interstate and Foreign Commerce Committee. After the death of Illinois congressional delegation leader Thomas J. O’Brien in 1964, Rostenkowski inherited O’Brien’s seat on the Ways and Means Committee. In 1966 and again in 1968, he was elected chairman of the House Democratic Caucus. "His rough edges, Chicago syntax, and intimidating bulk made him a stereotype of Chicago machine Democrats who the Washington media enjoyed portraying as mere stooges of mayor Richard J. Daley".[citation needed]

During his early years in congress, Rostenkowski’s record was typical of a northern democrat with close ties to a powerful big city political organization. He made sure that Chicago received its full share of funds under programs like the Law Enforcement Assistance Act. And in the face of white backlash from his district, he supported civil rights legislation and the various social welfare programs that made up President Lyndon B. Johnson's War on Poverty. He also argued in favor of federal funding of inner-city renewal projects and urban mass transit networks. By 1967, Daley often looked to Rostenkowski as Chicago’s chief liaison in Washington, and counted on him to deliver federal funds.

Rostenkowski supported the American effort in Vietnam until 1971, when he joined anti-war Congressmen in an attempt to force a quick withdrawal of American troops by voting against certain military appropriation bills.

A great admirer of Lyndon Johnson, he was tapped by the President to second the nomination of Hubert Humphrey as his vice president at the 1964 Democratic National Convention in Atlantic City. Four years later, at the 1968 Democratic National Convention in Chicago, Johnson would again ask Rostenkowski to take the podium, but this time the results proved costly to the young congressman’s future in Washington.

Met by anti-war protesters, racial unrest, and rioting on the streets, the 1968 Democratic National Convention, held at the International Amphitheatre proved an international embarrassment for the city. House Majority LeaderCarl Albert, the convention chairman, and Rostenkowski’s boss, was unable to control the rowdy behavior of the delegates inside the hall. Rostenkowski happened to be manning the phones on the podium when a furious Lyndon Johnson called from his Texas ranch and ordered him to take over the gavel to quiet the proceedings on the convention floor. (Ciccone)[clarification needed] Rostenkowski did, but an embarrassed Albert never forgave him.

Two years later, Rostenkowski was running for a third term as chairman of the Democratic Caucus and did not expect any opposition. But to his surprise, the Texas delegation nominated their colleague, Olin Teague, a popular war hero and Chairman of the Veteran's Affairs Committee. Even though Teague announced that he was not a candidate, they elected him anyway, 155 to 91. “I got defeated by Tiger Teague, who voted for me,” exclaimed Rostenkowski. “I saw him vote for me.” The liberal Democrats voted against Rostenkowski because of his ties to Mayor Daley, who was a pariah because of the 1968 convention and many of Albert’s friends voted against him because of the feud. (Remini,429)

Albert instead picked Rostenkowski’s close friend, Tip O'Neill, to become whip. This allowed O’Neill to leap over Rostenkowski on the leadership ladder, a ladder that led to O'Neill becoming speaker just six years later. "The events of that January shadowed the relationship between O'Neill and Rostenkowski from that point on" said former Representative James Shannon, "Every step of the way, Danny Rostenkowski looked at Tip O'Neill and, while he loved the guy felt, 'Man, that is where I should be'."[6]

In the early 1970s with his hopes of a leadership position lost, President Johnson out of office and Daley out of favor with the Republican administration, Rostenkowski began to rebuild his career. Though he rarely spoke on the floor, he was offering legislation on his own, such as anti-pollution bills, subsidies to local museums, and a proposal to grant renters the same tax breaks as homeowners. (Merriner, 117)

In 1974, Ways and Means chairman Al Ullman named Rostenkowski chairman of the committee's newly created subcommittee on health. In this role Rostenkowski obtained expertise in two critical areas of policy that would serve him well in his future: health care and taxes.

Late in 1976, Richard Daley died, leading to speculation that Rostenkowski would return home to Chicago and run for mayor. That same year, speaker Carl Albert announced he would not seek another term in Congress. Meaning Tip O’Neill would become speaker, this paved the way for Rostenkowski to begin the climb back up the leadership ladder.

He played a key role in the election of Jim Wright as the House Majority Leader. In return, O’Neill and Wright appointed Rostenkowski chief deputy to the new Democratic whip, John Brademas. The 1980 election was a disaster for the Democratic Party, but it opened up new opportunities for advancement to Rostenkowski.

With the defeats of both Ullman and Brademas, Rostenkowski, then the highest ranking Democrat on Ways and Means, had the choice of either succeeding Brademas as majority whip and taking a step closer to becoming speaker, or taking over as chairman of Ways and Means. With his reputation as an arm twisting politician capable of counting the house, the whip post would have seemed the logical choice. Instead, he surprised many by accepting the more complex challenge of becoming Chairman of the Committee on Ways and Means.

In 1980 the defeats of Chairman Al Ullman and Majority Whip John Brademas presented Rostenkowski, the highest-ranking member of Ways and Means, with a choice: he could chair that committee or succeed Brademas as Majority Whip. Since the position of Majority Whip is usually a stepping-stone to the majority leadership and, ultimately, to the House speakership, Rostenkowski was tempted to take it. However his skill and vast experience on the tax writing Ways and Means Committee won out.[citation needed] In January, 1981, Rostenkowski was elected committee chairman. As chairman his job was to satisfy the demands within the House and with the President, so that he could enact legislation. His early years as chairman were unkind,[citation needed] there was media speculation that he was, “in over his head” leading the complex tax writing committee.[citation needed] He lost his first few legislative battles with new President Ronald Reagan in 1981[citation needed] but, in 1983, he successfully piloted a complex overhaul of the Social Security System (NY Times Sep 22,1985). By 1984, Chairman Rostenkowski began to hit his stride. He was praised for his role in drafting the 1984 Deficit Reduction Act, a three-year, $50 billion tax hike. During his 13 years as chairman, Rostenkowski grew to become larger than life,[citation needed] especially to Ways and Means colleagues. “He ran the committee the old-fashioned way, with loyalty, trust, and his word” said former congressman Mike Andrews of Texas.[citation needed] He was a consensus builder who commanded through his political judgment and his ability to make a deal.[citation needed] Not as much of an expert on the tax code as was a previous chairman Wilbur Mills, or one to lead with a light hand, such as Ullman, Rostenkowski built a staff of dedicated experts who were given broad leeway to shape legislation, leaving for himself the political judgments, and actions that were required to pass the proposals. “Is it good law”? was his directive to his aides. “I want people to be able to say, that son of a gun, he had some guts, he had some fortitude, he realized what you had to be in order to be a national legislator.” (Pg. 288 Cohen)

A profile of Rostenkowski in the July 1989 issue of National Journal said “The chairman is a man of action, not words; a doer, not a rhetorician; one who thrives at the negotiating table, not the speaker’s lectern....he has nourished an image as a legislative strategist that is perhaps unsurpassed on Capitol Hill. He wants to make laws, and as a lobbyist put it, 'he doesn’t like people throwing a lot of dust in the gears'.”

On May 28, 1985, he rose to national prominence when he delivered the televised Democratic response to an Oval Office address by President Reagan calling for tax reform. In his eleven-minute address, Rostenkowski referred to his working class Polish neighborhood saying many neighbors have moved to the suburbs. “They make more money than their parents. In most cases their lives have changed for the better. But the tax system has changed for the worse, and so has their faith in it.” “Why should a bank teller pay a higher tax rate than the bank? Why should a gas station attendant pay a greater share than the oil company he works for? “Trying to tax people and businesses, everyone, fairly,” he told the nation. “That’s been the historic Democratic commitment.” He called for a tax system that was “simple and fair and also gives real relief for middle income tax payers.” Rostenkowski concluded the speech with an appeal to the “silent majority” He asked viewers fed up with the current tax system to write him a letter to show their support, “Even if you can’t spell Rostenkowski, put down what they used to call my father and grandfather: Rosty,” he said into the camera. “Just address it to R-O-S-T-Y, Washington, D.C.” Within days his appeal had generated over 75,000 letters making the obscure congressman something of a folk hero. The May 30, Washington Post asked "Has a Star been Born?" “Excellent" said the president’s political director, Ed Rollins. “He is the only guy who has not paled beside the president in a Democratic response.” Chris Matthews, then press secretary to House Speaker O’Neill said “He spoke right to the Knights of Columbus guy who voted for Reagan last time and might do it again, and he told him he’s watching out for his interests.” (Washington Post May 30, 1985) "He is deeply committed to the proposition that the tax code must be revised to allow working Americans to keep more of their salaries.” Congressional Quarterly, July 6, 1985.

reduced the top individual income tax rate to 50% and maximum capital gains rate to 20%.

indexed all the income tax brackets, person exemptions, and standard deductions

provided more rapid depreciation of business investments

expanded the eligibility for individual retirement accounts (“IRAs”) and increased the annual contribution limit to IRAs to $15,000.

updated estate and gift taxes by permitting an unlimited marital deduction, increasing the estate tax exemption to $600,000, and reducing the top estate tax rate to 50%.

Tax Equity and Fiscal Responsibility Act of 1982, Public Law. 97-248 (September 3, 1982). The 1982 Act addressed the burgeoning budget deficit by raising revenue by approximately $100 billion. It was the first of several critically important deficit-reduction bills enacted during the Rostenkowski chairmanship. The 1982 Act accomplished this goal by eliminating many unintended and obsolete tax incentives, and by strengthening the individual minimum tax on high-income individuals.

Social Security Amendments of 1983, Public Law. 98-21 (April 20, 1983). The 1983 Social Security Act provided solvency for the social security system which was facing bankruptcy before the enactment of this critical bill. Specifically, the 1983 Act secured the financial solvency of the Social Security Trust Fund by providing a dependable stream of revenues to the Trust Fund and by rationalizing the benefit structure including the retirement age determining benefit eligibility.

Interest and Dividends Tax Compliance Act of 1983, Public Law. 98-67 (August 5, 1983). The 1983 Act repealed the requirement for withholding on interest and dividends, replacing that system with a system of “backup withholding” and expanded information reporting. The 1983 Act also enacted various tax and trade incentives to encourage economic development in the Caribbean Basin countries.

Deficit Reduction Act of 1984, Public Law. 98-369 (July 18, 1984). The 1984 Act was another deficit reduction bill driven by two main concerns: (1) the threat to the economy posed by increasing budget deficits and (2) the erosion of the tax base due to the pervasive use of tax shelters. The 1984 Act raised revenues by $50.7 billion over a four-year period. Specifically, the 1984 Act

deleted a variety of tax provisions that were scheduled to take effect in 1984

increased excise taxes on distilled spirits

reduced various tax shelters used by corporations and businesses to inappropriately reduce their taxes

significantly reformed the taxation of life insurance companies to treat them more like other corporations.

reformed the taxation of U.S. persons working abroad and foreign corporations doing business in the United States.

reduced the holding period required to qualify for long-term capital gains taxation from one year to six months.

Consolidated Omnibus Budget Reconciliation Act of 1985, P.L. 99-272 (April 7, 1986). “COBRA” was focused primarily on health insurance issues. It required that employers provide their employees with continued health insurance coverage when they leave their jobs. The Act also expanded unemployment benefits. To pay for these benefit expansions, the Act permanently extended the 16 cents per pack cigarette excise tax, imposed an excise tax on smokeless tobacco, and increased the excise tax on coal production.

Tax Reform Act of 1986, Public Law. 99-514 (October 22, 1986). The 1986 Tax Reform Act was “landmark” legislation, providing comprehensive reform of the federal tax system with the goal of creating a fairer, more efficient, simpler, and more transparent system. It drastically reduced the number of deductions and tax brackets. The sharp decrease in the tax rates applicable to individuals and corporations meant that many other tax preferences (which benefited a small percentage of taxpayers) were no longer necessary. Specifically,the 1986 Act lowered the top individual marginal tax rate to 28%; increased the standard deduction to $5,000 for married couples; increased the personal exemption to $2,000; and increased the earned income tax credit (“EITC”). Capital gains were taxed at the same rate as ordinary income.

instituted limitations on the use of losses from passive investments by individuals to shelter other types of income. It also expanded AMT.

repealed many complex itemized deductions

limited deductions for interest on consumer loans, business meals and entertainment, and miscellaneous expenses.

reduced the top corporate tax rate to 34% (the lowest level of any industrialized country at the time), tightened corporate minimum tax, eliminated the investment tax credit and lengthened depreciation periods for capital investments.

expanded the research and development tax credit and enacted a new tax incentive for investments in low-income housing and,

created a deduction for the health insurance costs of self-employed individuals.

Omnibus Budget Reconciliation Act of 1987, Public Law. 100-203 (December 22, 1987). The 1987 Act was passed as another deficit reduction bill to raise $12 billion of revenue through various tax changes affecting corporations. Specifically, the 1987 Act (i) reformed and strengthened the tax provisions governing corporate mergers and acquisitions; (ii) repealed the use of the “completed contract method of accounting” by large defense contractors; (iii) limited the use of the installment sales method of accounting; and (iv) reduced the deduction for dividends paid by one corporation to another; and (vi) accelerated corporate estimated tax payments. The 1987 Act also imposed a $1 million limit on the mortgage interest deduction.

Medicare Catastrophic Coverage Act of 1988, Public Law. 100-360 (July 1, 1988). The 1988 Catastrophic Act focused on providing protection against catastrophic medical expenses under Medicare. Specifically, the Act expanded the Medicare program to provide protection against catastrophic medical expenses and for the first time, provided coverage under the Medicare program for prescription drugs. To pay for these benefit expansions, a new supplemental premium tax on all persons eligible for Medicare was enacted. After massive protests by seniors, the law was repealed starting the next year.

Omnibus Budget Reconciliation Act of 1989, Public Law. 101-239 (December 19, 1989). The 1989 Act was yet another deficit-reduction bill which made several changes to the corporate tax provisions of the Code. Specifically, the 1989 Act

excise taxes on certain luxury goods including cars over $30,000, boats over $100,000, airplanes over $250,000, and furs over $10,000. It increased

excise taxes on gasoline and motor fuels

excise taxes on tobacco and alcoholic beverages

excise taxes funding the Airport and Airway trust fund taxes; and

excise taxes on telephone services.

In addition, the 1990 Act (1) increased the top individual tax rate from 28% to 31% and the individual AMT rate from 21% to 24%, (2) capped the capital gains rate at 28%, and (3) phased-out personal exemptions above certain income thresholds.

The 1990 Act also affected payroll taxes by(1) raising the cap on taxable wages for Medicare from $53,400 to $125,000; (2) extending Social Security taxes to State and local employees; and (3) strengthened the unemployment insurance system by imposing a supplemental 0.2% unemployment insurance surtax.

The Act also created for the first time various incentives for clean and renewable energy investments as well as a tax credit for accommodations made for disabled persons.

Omnibus Budget Reconciliation Act of 1993, Public Law. 103-66 (August 10, 1993). The final deficit reduction act of the Rostenkowski Chairmanship came with the enactment of the 1993 Act which increased individual income tax rates and added two new brackets at the top of the earnings scale. The Act also increased the tax rates for the alternative minimum tax (AMT), while increasing the corporate tax rate to 35%. In addition, the gasoline tax was increased by 4.3 cents per gallon and the 2.5 cents per gallon motor fuels tax was extended. The 1993 Act also increased the earned income tax credit (EITC) and extended it to low-income single workers with no children.

Rostenkowski's political career ended in 1994 after a two-year investigation by the Justice Department. In a case led by future U.S. Attorney General Eric Holder, Rostenkowski was indicted on corruption charges for his role in the House post office scandal. He was forced to step down from all Congressional leadership positions. In elections later that year, Rostenkowski lost his seat and retired from political life.

Charges against Rostenkowski included: keeping "ghost" employees on his payroll (paying salaries at taxpayer expense for no-show "jobs"); using Congressional funds to buy gifts such as chairs and ashtrays for friends; diverting taxpayer funds to pay for vehicles used for personal transportation; tampering with a grand jury witness; and trading-in officially purchased stamps for cash at the House post office.[8][9]

While the stamps-for-cash allegation received the most media coverage, those charges were dismissed on the recommendation of the prosecutor.[10] In 1996, he pleaded guilty to reduced charges of mail fraud. He was fined and was sentenced to 17 months in prison, of which he served 15 at the federal prison in Oxford, Wisconsin, and the remaining 2 months at a half way house in Chicago. Rostenkowski was pardoned in December 2000 by President Clinton, who said "Rostenkowski had done a lot for his country and had more than paid for his mistakes."[11]

Rostenkowski acknowledged breaking House rules regarding stationery-store purchases and employing individuals who did little or no work – practices that his supporters argued were common on the Hill. “He took the hit for the whole House for practices that were there since time immemorial,” said Republican Congressman Bill Frenzel of Minnesota, who added, "I can’t believe he's venal or corrupt. He was inattentive and continued the old ways." (Cohen, 267)[clarification needed]

Former President Gerald Ford, whose lone pardon letter in all his ex-White House years was on behalf of Rostenkowski, told a biographer, "Danny's problem was he played precisely under the rules of the city of Chicago. Now, those aren't the same rules that any other place in the country lives by, but in Chicago they were totally legal, and Danny got a screwing". (DeFrank, 138) [12]

In his commentary titled: "The Rules Kept Changing; Dan Rostenkowski Didn’t",[13]Pulitzer Prize winning columnist Mike Royko, a frequent Rostenkowski critic, wrote “Nobody should be taking pleasure from Rostenkowski’s misfortune. Not unless you have never, ever, broken even a minor law and gotten away with it, fudged a bit on your taxes or violated any of the Ten Commandments.’ “Only a few decades ago, none of this would have been happening. That’s because the rules changed. Most of the things he was nailed for would have been legal and common or, at worst, nickel-dime offenses when he began his career in Congress.” Royko also questioned the motives of federal prosecutors, “Rostenkowski was a big political fish-the kind of trophy that an ambitious federal prosecutor loves to stuff and hang on his wall…That’s what did Rostenkowski in – a federal prosecutor’s personal ambitions."

In a 1998 interview with John F. Kennedy, Jr. for George Magazine, Rostenkowski estimated the government spent over $20 million on his case. "Not many people in this country can counter resources like that, and I’m not one of them... I couldn’t finance the fight any longer.”

In the end, Rostenkowski once lamented to a friend, “I’m going to jail for sending a guy a rocking chair." (Ciccone, 35)

Rostenkowski's downfall in 1994 was portrayed by Republicans as emblematic of Democratic corruption. The scandal helped fuel the Republican victory in the House, led by Newt Gingrich and his Contract with America. "The rise and fall of Dan Rostenkowski tracks the rise and fall of Democrats in the House," concludes Richard E. Cohen in his book on Rostenkowski.[14] "It is a story of power, accomplishments, and, ultimately, failure and humiliation." Rostenkowski was defeated by Republican attorney Michael Patrick Flanagan by a margin of eight points. Flanagan would be defeated two years later by Democrat Rod Blagojevich. Similar to Rostenkowski, Blagojevich was sentenced to 14-years in prison following 2012 federal convictions for corruption.

Throughout his career in Washington, Rostenkowski returned to Chicago almost every weekend. In his early days he would drive to and from Washington with two other young Illinois Congressmen, Republicans Harold Collier and future Republican leader Robert Michel. Upon his return every Friday, Rostenkowski met with Mayor Richard J. Daley at his City Hall office to discuss Chicago's agenda in Washington. Besides Daley, Rostenkowski worked with five other Chicago Mayors, Michael Bilandic, Jane Byrne, Harold Washington, Eugene Sawyer and Richard M. Daley. During the 1980s “Council Wars” pitted the mostly white City Council against Mayor Washington, Chicago’s first Black mayor. The city was dubbed “Beirut on the Lake” by the Wall Street Journal. During this turbulent period Rostenkowski was a tower of stability. “He made sure the city got its fair share, no matter who was mayor,” said Bill Daley “Danny felt he had to help the pathetic armatures in the Mayor’s office because he had a love for the city. “He did more for the city than anybody else,” said Alderman Edward M. Burke, chairman of the City Council’s finance committee. “But he never asked for credit. He just went to the mayor. That’s the way it’s done in Chicago.” Local political scientist Paul Green said, “During a decade of chaos, he became an insurance policy for the city”.(Cohen 174)

Rostenkowski gave up his position as Democratic Committeeman of the 32nd Ward in 1984, but retained local influence as he was able to essentially hand the position to his protege, Alderman Terry Gabinski.

An unabashed supporter of Chicago interests, Rostenkowski paid attention to the needs of Chicago based institutions –especially when they promised more jobs for Chicago area workers."I make no apology for my efforts to build a stronger Chicago." (Cohen) In the early 1980s Rostenkowski successfully fought off repeated attempts to impose a transaction tax on commodity traders at the Chicago Board of Trade, the Chicago Mercantile Exchange and the Chicago Board of Options Exchange. Such a tax would have been fatal to the exchanges, driving business out of Chicago to overseas markets. (Merriner-186) Rostenkowski helped secure for the city of Chicago the right to tax passengers flying in and out of its airports. The tax, originally intended to raise money for the construction of a third airport, now yields $90 million annually for improvements at O'Hare and Midway Airport. But its passage was in big trouble before Rostenkowski stepped in to salvage it. According to Ways and Means lore, he threatened to hold up the entire federal budget at one point until he was sure the tax was in place. (Brown)

In his book Naked economics: undressing the dismal science, author Charles Wheelan wrote “We Chicagoans can drive around the city and literally point to things that Rosty built.” Dan Rostenkowski did deliver federal funds for Chicago and the State of Illinois. Some of his notable projects include: securing thirty two million dollars for the Blue Line of the Chicago Transit Authority which expanded travel from the loop to O’Hare Airport, four hundred and fifty million to repave and expand the Kennedy Expressway, twenty five Million to fix the dangerous S Curve on Lake Shore Drive[15] four billion dollars for the Deep Tunnel Project, which was designed to keep raw sewage from entering the Chicago River and Lake Michigan, while also protecting over half a million suburban and city home owners threatened by flooded basements.(Cohen,176) He followed that with $42.4 million for reservoirs in McCook and Thornton Townships and by O'Hare airport, $16.8 million for downtown's State Street Mall renovation, $3.5 million for the construction of the Cook County Boot Camp, a military-style alternative for first-time youthful offenders. When the Chicago White Sox baseball team was considering moving to Florida, Rostenkowski secured a $150 million bond authority for the construction of US Cellular Field. Once nearly abandoned and left in disrepair, he ensured $75 million in tax-free bonds for the remodeling of Navy Pier, which today has become Chicago’s preeminent tourist attraction.[citation needed] To ease erosion that threatened Lake Shore Drive and several harbors and museums along the Chicago lake front, Rostenkowski secured $2.2 million for the Chicago Shoreline Protection Project, and laid the foundation for a coordinated partnership among the Army Corps of Engineers, the federal government and the City of Chicago. He also was responsible for securing funding for the upkeep of Chicago area bridges including the Chicago Skyway, the Division, Cermak, and Roosevelt street bridges.

In January 1983 Plitt Theaters filed a lawsuit to obtain a permit to demolish the historic Chicago Theater. Mayor Jane Byrne and other civic leaders appealed to Rostenkowski to assist them in obtaining a federal Urban Development Action Grant to save the theater. Grants of this kind were being frozen from Chicago by housing secretary Samuel Pierce in reprisal for Rostenkowski's opposition to the Reagan administration's Urban Enterprise Zone bill.(Merriner, 187) Rostenkowski considered these zones a Republican gimmick that would help businesses escape taxes without addressing chronic inner-city unemployment. Rostenkowski called his friend Vice President George H. W. Bush, “If I don’t get that grant, you're going to have one very pissed off chairman of the Ways and Means Committee for your administration's pending tax bill”.[16] Shortly thereafter, Pierce phoned Rostenkowski to ask if he could come up and see him. Sure, the congressman replied, just bring the papers for the theater project.[17]

In a move that was controversial at the time, Rostenkowski won tax breaks for local developers to build Presidential Towers, a large four-tower apartment complex in the middle of what was then a Skid Row neighborhood. The project spurred development of Chicago’s West Loop and led to thousands of young professionals moving to downtown Chicago.[18] The once blighted area grew to attract restaurants and other industries, including Harpo Studios, where The Oprah Winfrey Show was taped.

Following his political career, he operated Danross Associates, a Chicago based legislative and government affairs firm. He also worked as a political commentator, as well as a guest lecturer at Northwestern University and a Senior Fellow at Loyola University Chicago. Rostenkowski received a federal pension of between US$97,000 and US$125,000 per year. Congressional pensions are based on years of service and Rostenkowski is one of the few Congressmen to have served 36 years in Congress.